The Price-Anderson Act and the
Three Mile Island Accident
OECD/NEA Workshop
Nuclear Damages, Liability Issues, and Compensation Schemes
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• Overview of Nuclear Liability in U.S.
• Three Mile Island Accident
– Timeline of Accident
– Response
• Nuclear Liability for TMI Accident
– Implications for Price-Anderson Coverage
– Claims and Payments
• Lessons for Today
Overview
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Price-Anderson Act Overview
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• Purposes:
– Encourage private development of nuclear power
– Establish legal framework for potential liability claims
– Provide ready source of funds to compensate victims
Price-Anderson Act
1957 Price-Anderson Act
1966 Strict liability for major
accidents
1975 Secondary financial
protection layer
1988 Procedure for paying
damages beyond limits
2005 Extended
through 2025
1950 1960 1970 1980 1990 2000 2010
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• “Public liability” is personal injury or property damage
to persons or property located away from the reactor
site (off-site) from a nuclear incident
• A nuclear incident is:
– Any occurrence causing bodily injury, sickness, disease or
death, or damage to property
– Arising out of or resulting from the radioactive, toxic,
explosive or other hazardous properties of
– Source, special nuclear, or by-product material
Public Liability
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• Price-Anderson financial protection provides
universal coverage
– Define “insured” as “anyone who may be liable”
– To be liable is to be insured
• Coverage protects:
– Licensees
– Contractors, vendors and suppliers
– Lessors or other investors in a nuclear reactor
• Exclusive remedy
– Economic channeling to required insurance policies
Omnibus Coverage
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• Each operator of large nuclear power plant (>100
MW) must maintain primary financial protection
– Applies to public (off-site) liability claims
– Coverage = maximum liability insurance available at
reasonable cost and on reasonable terms from private
sources
• Purchase insurance from a pool of stock companies:
– American Nuclear Insurers (ANI)
– “Facility Form” for nuclear energy liability policy provides
evidence of coverage
Primary Financial Protection
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Primary Financial Protection Policy Limits
$60 $74 $82
$95 $110
$125 $140
$160
$200
$300
$375
$0
$50
$100
$150
$200
$250
$300
$350
$400
1957 1966 1969 1972 1974 1975 1977 1979 1988 2003 2010
$ in
Mill
ion
s
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• Every reactor operator must participate in a
secondary (excess) insurance plan
– If primary insurance exceeded, all nuclear operators
required to pay deferred (“retrospective”) premium
• Maximum deferred premium and limits annual deferred premiums
(for each unit, per incident)
• Subject to a 5% surcharge if funds to pay claims and litigation costs
are insufficient
• Significant funds available from pool of all reactor
operators
– Total amount available linked to number of operating
reactors
Secondary Nuclear Liability Insurance
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• Aggregate public liability for single nuclear accident
– Primary + secondary financial protection
– $375 million + $121 million x 104 reactors = ~$13 billion
• If sufficient funds not available:
– President must submit report and proposals for
compensation to U.S. Congress.
– Congress authorized to provide full and prompt
compensation
• Stafford Disaster Relief and Emergency Assistance
Act
Liability Limit
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Liability Limits
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
1957 1977 2002 2013
Government Indemnity
$110
Secondary $300
Primary $140
Primary $60
Government Indemnity
$375
1957 1977
Secondary $9,338
Secondary $13,600
Primary $200
Primary $375
$ in
Mill
ion
s
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Primary and Secondary Insurance
• Public Liability
• Excludes “Acts of War” but covers terrorism
• Includes offsite environmental for ENO or transport accident
Required Property Insurance
• Losses to nuclear facility, including land, buildings, equipment
• On-site environmental clean-up
Other Policies
• Accidental Outage
• Master Workers Policy
• Suppliers’ and Transporters’ Policy
• Offsite environmental cleanup (non-ENO)
Summary of Coverage
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Three Mile Island Accident
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• Two-unit PWR station:
– TMI-1: 800 MWe (1974)
– TMI-2: 906 MWe (1978)
• Located near Harrisburg,
Pennsylvania
Three Mile Island
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• Accident begins at 4 am
– Plant trips when cooling
water pump stops
functioning
– Unknown to operators,
valves for backup pumps
have been closed
– Pressure relief valve in the
reactor opens as designed,
but later fails to close
– Cooling water released and
eventually the core is
uncovered
Accident - March 28, 1979
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• Core damage worse than
initial indications:
– Hydrogen gas buildup in
containment
– Minor radiation release from
auxiliary building to relieve
pressure on the primary
system
Accident - March 29-April 1, 1979
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• Governor of Pennsylvania:
– First, directs people within 10
miles to stay inside
– Then, advises pregnant
women and preschool
children within five miles of
TMI to evacuate
– Nearly 200,000 residents
evacuate
• “Threat of catastrophe” over
on April 4
• Order lifted on April 9
Accident - March 29-April 1, 1979
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• May 1979 – Reactor placed
in “cold shutdown”
• July 1979 – Radioactive
Krypton gas purged from
the reactor building to
prepare for cleanup crews
• October 1985 – Process of
defueling reactor begins
• Late 1993 – TMI-2 placed in
monitored storage
The Aftermath
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Nuclear Liability and TMI
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• Advanced money to evacuated
families to cover living expenses
• Immediately paid pregnant women
and pre-school age children who
evacuated five-mile area
– 3,000 claimants
– $1.4 million for living expenses and
lost wages
Some Funds Available Quickly
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• Within weeks, class action filed for businesses and
residents within 25 miles of the plant
– >2,000 personal injury claims
– Other claims: lost wages, evacuation costs, loss of
property value, loss of profits
• September 1981 – partial settlement (not injury cases)
– $20 million for economic harm
– $5 million for the establishment of a Public Health Fund
• Examples:
– Most businesses: two weeks of gross profits
– But, for those nearest TMI, damages more complex and
payments relied on expert appraisals
Immediate Litigation and Partial Settlement
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• February 1983 – $2.35 million in evacuation loss
claims and wage loss claims to 10,993 claimants
• February 1984 – Payments to local governments:
– $250,000 payment to Pennsylvania
– $235,000 payment to municipalities within 25 miles
• In 1985, $14.25 million to settle bodily injury and
emotional distress claims for 280 people
Additional Payments
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Total Payments for TMI Accident
Class Action Settlements $34 million
Legal Expenses $29 million
Health Studies $5 million
Evacuation Costs $1 million
Other Settlements $1 million
Total Payout for TMI = $71 million
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• Total TMI-2 “clean up” cost
was $975 million
– Ratepayers ~$125 million
– Property insurance $300
million
– Some research funding
– Balance by shareholders
• TMI-1 restarted in 1985
– Still operating
– Licensed through 2034
• TMI-1 and TMI-2 will be
decommissioned at same
time
TMI-2 “Clean-Up”
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TMI Lessons for Nuclear Liability
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• Offsite releases were small; offsite damage very
limited
• Emergency Preparedness
– Participate in Emergency Planning exercises
– Coordinated response and communications
• Liability scheme worked as intended
– Legal framework functioned effectively
– Ready source of funds available
– Precedent can be applied in future
Lessons from TMI for Nuclear Liability
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Questions?
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Tyson Smith is a partner in the firm’s Washington, DC and San Francisco offices who has
concentrated his legal practice in the area of nuclear energy regulation since 2003.
Mr. Smith represents and provides advice to clients regarding compliance with the
regulations of the U.S. Nuclear Regulatory Commission. He has been extensively involved
in initial licensing of new nuclear facilities, including commercial power reactors and
uranium enrichment facilities. He regularly assists clients throughout the nuclear fuel cycle
in licensing, compliance, and enforcement matters.
Prior to joining the firm, Mr. Smith served as an attorney for the U.S. Nuclear Regulatory
Commission.
Mr. Smith is a member of the American Bar Association and served as chair of the Special
Committee on Nuclear Power in the ABA’s Section of Environment, Energy, and
Resources. Mr. Smith was ranked in Chambers USA 2013 as one of the nation's top
lawyers in the nuclear energy regulatory and litigation practice.
Practice
Nuclear Energy
Energy & Environmental
Energy Investigations
Education
Vanderbilt University, B.E.
Stanford University, M.S.
Lewis and Clark, J.D.
Bar Admissions
California
District of Columbia
Tyson R. Smith Partner
+1 (415) 591-6874
Energy Group